Leveraged Loans Are Better Value Than Junk Bonds, Investor Says
- Leith Wheeler says loans offering higher yields for same risk
- Investors have been pulling money from loan funds for 13 weeks
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U.S. junk bonds look expensive after their prices have jumped since last year, and buying leveraged loans is a better bet now, according to Vancouver-based money manager Leith Wheeler Investment Counsel Ltd.
The firm has been increasing its exposure to loans relative to high-yield bonds since the middle of last year, as it has found loans trading with higher yields than bonds, said Dhruv Mallick, a portfolio manager. That’s true even if the two forms of debt are of similar quality, he said.